An
Austin, Texas, entrepreneur pleaded guilty today for fraudulently
soliciting hundreds of thousands of dollars in political contributions
through several scam-PACs that he founded and advertised as supporting
candidates for the Office of the President of the United States during
the 2016 election cycle.

Assistant Attorney General Brian A. Benczkowski of the Justice
Department’s Criminal Division and Special Agent in Charge Christopher
Combs of the FBI’s San Antonio Division made the announcement.

Kyle Gerald Prall, 40, of Austin, Texas, pleaded guilty to one count
of mail fraud before U.S. Magistrate Judge Andrew W. Austin of the
Western District of Texas. A sentencing hearing has not yet been
scheduled.

“Prall exploited the honest political engagement of countless
citizens by representing that his organizations were supporting
presidential candidates when in fact he was just stealing
contributions,” said Assistant Attorney General Benczkowski. “In
addition to cheating people out of their money, fraud committed in
connection with our elections corrodes public confidence in our
democratic institutions. The Department of Justice is committed to
investigating and prosecuting these crimes.”

“Making donations to a political cause, campaign or candidate is an
important expression of free speech and a right all Americans should
enjoy,” said Special Agent in Charge Combs. “By misappropriating the
donations for his own personal use, the defendant not only violated the
trust of his victims, he also deprived them of their fundamental right
to free speech. The FBI is committed to protecting this right, and
holding individuals, like the defendant accountable. Before making
donations citizens should be mindful of this unscrupulous fraud scheme
and exercise due diligence in researching the legitimacy of an
organization.”

According to admissions made in connection with his plea, in 2015 and
2016, Prall created several political committees—including Feel Bern,
HC4President and Trump Victory—which he advertised online to solicit
contributions purportedly in support of presidential candidates in the
2016 election. Prall advertised that the contributions would be used to
support the candidates in various ways, including paying for
transportation for voters to the polls; paying for training for
volunteers to make phone calls and canvass neighborhoods to support the
respective candidates; paying to help voters obtain appropriate
identification documents and making contributions directly to one of the
candidates and to other organizations supporting his campaign. In
reality, Prall did not intend to, and did not, use the contributions for
these purposes and instead transferred much of the money to himself
through sham LLC accounts and used the other funds to generate
additional contributions to his fraudulent political committees.
Specifically, Prall admitted that of the $548,428 in contributions, he
transferred $205,496 to himself through sham LLCs that he created for
the purpose of moving the money, while contributing less than $5,100 to
political causes. Additionally, Prall used the political committees’
debit cards to pay for his personal travel and entertainment expenses,
such as travel to Jacksonville, Florida and Belize; hotel stays in Miami
Beach, Florida, and Austin, Texas; and to pay for food, hookah, alcohol
and bottle service, “club dances performed by entertainers,” room
service, minibar charges, a deep-tissue massage and a pet-cleaning fee.

As part of his plea, Prall agreed to pay restitution in the amount of
$548,428—the total amount he raised—including the forfeiture of the
$205,496.68 he transferred to himself through sham LLCs during the
scheme.

The FBI’s San Antonio Division is investigating the case. Deputy
Chief John D. Keller and Trial Attorney James C. Mann of the Criminal
Division’s Public Integrity Section are prosecuting the case.

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